Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Photo: Olivier Douliery / Getty Images
The Department of Commerce will recommend tariffs on steel and aluminum that, if applied, would be the first shots in a global trade war, according to two sources briefed on the report.
Background: The fight over whether to use the Section 232 law to impose tariffs has already become the hottest trade fight inside the Trump White House. Gary Cohn, Steven Mnuchin, Rex Tillerson and James Mattis have all been fighting against these tariffs on steel and aluminum — arguing they would harm the global economy and damage relationships with allies.
The opposition of Mattis is important because these are national security recommendations. Congress would also likely be extremely upset about the imposition of national security tariffs in direct conflict with the Secretary of Defense.
The options
The report suggests three options for each, ranging from overall tariffs to targeted tariffs to overall quotas.
Aluminum:
- Broad option: 7.7% tariff on all aluminum exports from all countries.
- Targeted option: 23.6% tariff on all products from China, Hong Kong, Russia, Venezuela and Vietnam. Other countries face quota set at 100% of 2017 exports to U.S.
- Overall quota option: A quota on imports from all countries to a maximum of 86.7% of their 2017 exports to U.S.
Steel:
- Broad option: 24% tariff on all steel imports from all countries.
- Targeted option: Tariff of 53% (at least) on steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, Korea, Russia, South Africa, Thailand, Turkey and Vietnam. Other countries have quota set at 100% of 2017 exports to U.S.
- Overall quota option: Quota for all countries of 63% of their 2017 exports to U.S.
What we're hearing
The only exclusions: Domestic companies can apply for exclusions based on national security or a lack of domestic supply.
A former senior government trade official said that without major exemptions, these recommendations would represent:
"[T]he opening shot in a trade war... a declaration of war against the world on aluminum and steel... These are some of our closest treaty allies... These are some serious numbers."
Quote from a trade expert:
"This would be beyond a trade war. You're talking about blowing up the WTO."
Flashback to January 14th: Inside the real trade fight
Editor's Note: This article has been updated to reflect the final numbers from the Commerce report.